NMSURF filed its permit applications on November 24, 2020, but they were rejected by a letter from December 23 of that year. The New Mexico agency's short letter claimed that NMSURF was not a "public utility" eligible for free use of the right-of-way. A lawsuit followed, as NMSURF claimed that the denial of its applications violated Section 332(c)(7)(B)(iii), which requires that any denial "shall be in writing and supported by substantial evidence contained in a written record."
According to the District Court: "Plaintiff alleges, and Defendant does not contest, that the Denial Letter contains no evidence in support of the assertion that Plaintiff is not eligible for the requested permits because it is "not a public utility rendering essential services subject to consumer-rate regulation by the Public Regulatory Commission.'"
The District Court added:
Defendant’s Denial Letter falls well short of providing any evidence, let alone substantial evidence, in support of its denial of Plaintiff’s permit applications. Defendant provides no criteria for its denial beyond conclusory statements relating to Plaintiff’s supposed status as a non-utility. Defendant has done nothing to rebut the evidence proffered by Plaintiff that it is in fact a proper utility within the statutory meaning and that it appropriately adhered to application procedures. The Denial Letter did not proffer any objections to Plaintiff’s plans or construction designs. In fact, it does not offer any concerns beyond the supposed status of Plaintiff as a non-utility...
The Denial Letter states that Defendant has 'entered into rulemaking to promulgate a new telecom-broadband section to NMAC 17.4.2...' but Defendant provides no indication that any rules have actually been issued or what the substance of the purported new rules would be. Thus, the Court finds that Petitioner has shown a substantial likelihood of prevailing on the merits and concludes that Defendant's denial of Plaintiff’s permit applications violates the provisions of § 332(c)(7)(B)(iii) in its failure to provide substantial evidence in its denials.
In this case, wireless service provider NMSURF scored a decisive win with the court issuing a preliminary injunction against the New Mexico agency. The District Court's decision shows the importance of federal law's bar on actions by state and local governments that have the effect of prohibiting the offering of wireless services – including actions that lack any written explanation or evidence for the state or local government's refusal to allow construction or modification of wireless infrastructure.
Hopefully, other state and local government agencies will learn from the New Mexico agency's mistake and avoid taking similar actions when reviewing wireless infrastructure permit applications. Also, keep in mind the needless expenses the state agency incurred when it didn't have a leg to stand on in court, and also the economic opportunity costs resulting from the seven months it took before NMSURF received vindication in court.
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